Instructions For Form 3520-A - Annual Information Return Of Foreign Trust With A U.s. Owner - 2003


2 0
Department of the Treasury
Internal Revenue Service
Instructions for
Form 3520-A
Annual Information Return of Foreign Trust
With a U.S. Owner
Section references are to the Internal Revenue Code unless otherwise noted.
Application for Extension of Time To File Certain Excise,
A Change To Note
Income, Information, and Other Returns.
A Canadian registered retirement savings plan (RRSP) or a
Who Must Sign
Canadian registered retirement income fund (RRIF) is relieved
of any obligation to file Form 3520-A with respect to a U.S.
If the return is filed by:
citizen or resident alien interest holder who is subject to the
An individual or fiduciary, it must be signed and dated by that
simplified information reporting requirements of Notice 2003-75,
individual or fiduciary.
2003-50 I.R.B. 1204, with respect to the RRSP or RRIF. It is
A partnership, it must be signed and dated by a general
anticipated that most, if not all, such U.S. citizens or resident
partner or limited liability company member.
aliens will be subject to the simplified reporting rules described
A corporation, it must be signed and dated by the president,
in Notice 2003-75.
vice president, treasurer, assistant treasurer, chief accounting
officer, or any other corporate officer (such as a tax officer)
How To Access the Internal Revenue
authorized to sign.
Bulletin (I.R.B.)
The paid preparer must complete the required preparer
information and:
You can access the I.R.B. on the internet at
Sign the return in the space provided for the preparer’s
(post-1995 Bulletins only). Under contents, select Businesses.
Under topics, select More Topics. Then select Internal
Give a copy of the return to the filer.
Revenue Bulletins.
General Instructions
The U.S. owner is subject to a penalty equal to 5% of the gross
value of the portion of the trust’s assets treated as owned by
Purpose of Form
the U.S. person at the close of that year if the foreign trust:
Form 3520-A is the annual information return of a foreign trust
(a) fails to file a timely Form 3520-A or (b) does not furnish the
with at least one U.S. owner. The form provides information
information required by section 6048(b). See section 6677(b).
about the foreign trust, its U.S. beneficiaries, and any U.S.
Additional penalties may be imposed if noncompliance
person who is treated as an owner of any portion of the foreign
continues after the IRS mails a notice of failure to comply with
required reporting. See section 6677(a).
Criminal penalties may be imposed under sections 7203,
Who Must File
7206, and 7207 for failure to file on time and for filing a false or
A foreign trust with a U.S. owner must file Form 3520-A in order
fraudulent return.
for the U.S. owner to satisfy its annual information reporting
Reasonable cause. No penalties will be imposed if the
requirements under section 6048(b). Each U.S. person treated
taxpayer can demonstrate that the failure to comply was due to
as an owner of any portion of a foreign trust under sections 671
reasonable cause and not willful neglect.
through 679 is responsible for ensuring that the foreign trust
Note: The fact that a foreign country would impose penalties
files Form 3520-A and furnishes the required annual statements
for disclosing the required information is not reasonable cause.
to its U.S. owners and U.S. beneficiaries.
Similarly, reluctance on the part of a foreign fiduciary or
Exception. Canadian RRSPs and Canadian RRIFs are not
provisions in the trust instrument that prevent the disclosure of
required to file Form 3520-A with respect to a U.S. citizen or
required information is not reasonable cause.
resident alien interest holder who is subject to the simplified
information reporting requirements of Notice 2003-75 with
respect to the RRSP or RRIF. In addition, other eligible
Canadian plans within the meaning of section 3 of Rev. Proc.
2002-23, 2002-15 I.R.B. 744, are relieved of any obligation to
A distribution is any gratuitous transfer of money or other
file Form 3520-A with respect to a U.S. citizen or resident alien
property from a trust, whether or not the trust is treated as
beneficiary who has made an election in accordance with
owned by another person under the grantor trust rules, and
section 4 of Rev. Proc. 2002-23 and has complied with the
without regard to whether the recipient is designated as a
annual reporting requirements of Rev. Proc 2002-23.
beneficiary by the terms of the trust. A distribution includes the
receipt of trust corpus and the receipt of a gift or bequest
When and Where To File
described in section 663(a).
File a complete Form 3520-A (including pages 3 and 4) with the
A distribution also includes constructive transfers from a
Internal Revenue Service Center, Philadelphia, PA 19255, by
trust. For example, if charges you make on a credit card are
the 15th day of the 3rd month after the end of the trust’s tax
paid by a foreign trust or guaranteed or secured by the assets
year. Give copies of the Foreign Grantor Trust Owner
of a foreign trust, the amount charged will be treated as a
Statement (page 3) and the Foreign Grantor Trust
distribution to you by the foreign trust. Similarly, if you write
Beneficiary Statement (page 4) to the U.S. owners and U.S.
checks on a foreign trust’s bank account, the amount will be
beneficiaries by the 15th day of the 3rd month after the end of
treated as a distribution.
the trust’s tax year.
Also, if you receive a payment from a foreign trust in
An extension of time to file Form 3520-A (including the
exchange for property transferred to the trust or services
statements) may be granted. For details, get Form 2758,
rendered to the trust, and the fair market value (FMV) of the
Cat. No. 25096U


00 votes

Related Articles

Related forms

Related Categories

Parent category: Financial
Page of 4